Micro businesses: Payday Loans to the Rescue
With the slowing down of the economy because of the economic crisis of
2008, the banking system has experienced serious downsizing. Banks have
shown great reluctance in providing loans to small (including the very
small or micro) businesses. As a a result a small business or a micro
business in desperate need for capital finds it almost impossible to get
the same from a major bank
.Payday loans to the rescue :
survey in the United Kingdom found that only 10% of the applications
for loans from micro businesses to banks were accepted. Getting loans
from banks and financial institutions has become an increasingly tough
task for most small and micro businesses. With traditional banking
avenues closed to them, small businesses and micro businesses are
increasingly turning to payday loans as their best hope for capital
was found that in the year 2013 alone, over a quarter of micro
businesses turned to payday loans to meet their capital expenditure
plans and further develop their businesses.
What are small and micro businesses ?
businesses are businesses with 10 to 20 employees while micro
businesses are those with less than 10 employees. Typically a micro
business could be a small mechanic shop, a dry cleaning service, a food
caterer, a jewelry store, or perhaps a grocery store on the corner
street. Although very small, these businesses together employ a huge
section of the population and may be considered as the life blood of an
economy.Payday loans to the rescue.
The micro businesses
lack the resources and collateral to raise any significant capital from
major banks or financial institutions. This makes it difficult for them
to meet urgent capital expenditures such paying for the machinery or
transportation. Even meeting working expenditure is a hard task as
sometimes it might become difficult for a micro business to meet basic
obligations such as payment of bills or paychecks of junior and middle
level employees.Payday loans are of tremendous benefit in such a situation.
loans offer immediate cash advances so that the small and micro
businesses may meet their immediate obligations. Further, payday loans
are confidential. This is important as any news of a small business
going for an emergency loan might be exploited by competitors, scare
investors and could be a black mark against the small business. With its
immediate cash payments and promise of confidentiality, payday loans
significantly help small and micro businesses in what is often a
delicate situation fraught with great complications.